June 17, 2024
United States:
Tariff Debate Heats Up With Lagarde Defending Rules-Based System
With less than five months to go before the US presidential election, the debates about higher tariffs and their inflationary effects on the economy are starting to heat up.
If elected again, Donald Trump has pledged to enact a 10% across-the-board tariff on imports that he says will raise billions of dollars in revenue to pay for more tax cuts. But mainstream economists say such a plan, plus a 60% levy on Chinese imports, would amount to a tax increase for American households.
United Kingdom:
UK Inflation May Fall to 2% Target, But Too Late to Save Sunak
UK inflation is expected to fall to the Bank of England’s target for the first time in almost three years, but the milestone may do little to help Prime Minister Rishi Sunak’s beleaguered government ahead of the July 4 general election.
Economists expect official figures on Wednesday to show consumer prices rose 2% in May from a year earlier, slowing from 2.3% in April. It would represent a symbolic moment after a painful battle to bring down inflation from double-digit levels just over a year ago.
Asia:
China Leaves Key Rate Unchanged on Currency Pressure, Liquidity
China’s central bank left a key interest rate steady for the tenth straight month, displaying caution on monetary easing given abundant liquidity and the pressure to prevent the yuan from weakening further.
The People’s Bank of China kept the rate on one-year policy loans, the so-called medium-term lending facility, steady at 2.5% on Monday, in line with the forecast in a Bloomberg survey. It withdrew a net 55 billion yuan ($7.6 billion) from the banking system to avoid excessive liquidity.
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